Veteran Trader Finds Successful Forex Trading Strategies and Techniques

Forex trading strategies and techniques along with the market are unique. It doesn`t sleep, so there are no opening or closing gaps. Forex trading strategies are highly liquid, and difficult to influence. There are no commissions and few, if any, regulations. It`s the largest market out there, and it`s more than a little intimidating. However, with a good trading system, a disciplined approach, and a willingness to learn, the forex market can become a very lucrative place to trade. Here are a few pointers to get you started in the right direction.

I recommend that traders with small accounts ($25,000 and under), always trade with the trend. Good Forex trading strategies for beginners to use is to look for trades that flow in any direction, which can be somewhat unreliable. While forex trading easily permits bi-directional trades, trading in the direction of the trend will improve your odds over the long run.

One of many other excellent Forex trading strategies to use this way to improve your odds is to have at least two accounts, including at least one real account and one demo account. You don`t stop learning when you start trading real dollars. Use your demo account to test any alternative trades you might be considering. For example, you can shadow your real trades with identical ones in your demo account, but you can widen your stops in the demo to see if you're being too conservative.

If you have the right amount of money, try Forex trading strategies that allow trading two lots rather than one. Or even three lots. This is safer than only trading one. When everything is riding on one trade, it`s hard to make good decisions. Having a few positions going is a good way to take the intensity out of a trade. Conversely, you may also want to consider extreme trading, which can be the most conservative trading, when you think about it. Trading at the extremes increases the odds that you have chosen the right direction.

No Forex trading strategies would be good if you did not take the time to examine the daily charts, the four-hour charts and one-hour charts. These exist to help you time your trades. When you are trading at 30- and 15-minute time increments, it can take a great deal of dexterity, and it`s good to have this knowledge at your fingertips.

Some other Forex trading strategies means that you don't trade the time frame that is offered. Trade the pattern instead. Reversal patterns, hesitation patterns and breakout patterns show up a lot. Learn to look for these patterns in any time frame. While the patterns are always there if you look for them, leading indicators aren`t there. Don`t spend all your time looking for them, there simply aren`t any. Some firms make a lot of money selling software that predicts the future, but the reality is that if those products really worked, they wouldn't be telling you about it. Also, try and follow the Upside Down Rule. If you can turn a chart upside down and it still looks the same, avoid it all together.

You should fully check the Big Five: the dollar/yen, euro/dollar, Swiss franc/dollar, euro/yen and pound/dollar before you decide to take a position in any one of them. There might be something obvious that you`ve missed. Finally, this is the best out of all the Forex trading strategies I know. Don't keep count of your profits in your first 20 trades. Keep track of the percentage of wins instead. Once you know you can pick directions, your profits can be increased with multi-plot trading and by using variations in your stops. Then, you`ll be ready to fine-tune your system, and start realizing substantial profits.

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"How To" Start Trading The Forex Market? (Part 6)

HOW TO READ FOREX PRICE CHARTS?

Forex Price Charts, what DO they mean and HOW to use them?

Important numerous facts as discipline, trading rules, not being greedy etc., but one of the most important things is:

LEARN to read the charts as Charts represent the lifeblood of the market.

I admit that reading charts, and interpreting patterns, are more an art than a skill. Base and apply your entry and exit decisions on YOUR OWN combined methods of technical and fundamental analysis.

FOREX charts, are easier to interpret and to use. They reflect a slower moving, stable economy of a country, compared to the stock market, with its daily drama of company reports, Wall Street Analysts and shareholder demands.

Unlike stocks, currency charts do not spend much time in trading ranges and have the tendency to develop strong trends. Furthermore, Forex with its 4 Mayor currencies is easier to analyze than tens of thousands of stocks.

(Mayor currencies are: USD/JPY, EUR/USD, GBP/USD and USD/CHF)

The complimentary FREE live charting software, with the ultimate cutting edge technology provided by http://www.fenixcapitalmanagement.com/will be absolutely sufficient for you to analyze and watch any one currency pair. Understanding just a few basic points about the technical analysis of currency chart can lead to increased profit potential.

Pricing - Price reflects the perceptions and action taken by the market participants. It is the dealing between buyers and sellers in the Over-The-Counter (OTC) or "interbank" market that creates price movement. Therefore, all fundamental factors are quickly discounted in price. By studying the price charts, you are indirectly seeing the fundamental and market psychology all at once , after all the market is fed by two emotions - Greed and Fear - and once you understand that, then you begin to understand the psychology of the market and how it relates to the chart patterns.

Data Window Chart - FCM and most online charting stations, when you click on a price bar or candlestick, it will display a small box of data usually called a display window which will contain the following items:

H = Highest Price L = Lowest Price O = Opening Price C = Close Price (or Last Price)

The most common types of price bars, used in FOREX trading, are the Bar Chart and the Candlestick chart:

Bars Charts -

Price bars are a linear representation (a line) of a period of time. This enables the viewer to see a graphic representation summarizing the activity of a specific time frame. As an example, I use 10 minutes, 60 minutes and daily time interval for my systems. Each bar has similar characteristics and tells the viewer several important pieces of information.

First, the highest point of the bar represents the highest price that was achieved during that time period. The lowest point of the bar represents the lowest price during the same period. Regular bars display a small dot on the left side of the bar which represents the opening price of the period and the small dot on the right side represents the closing price of the period.

Candlesticks - Japanese Candlesticks, or simply Candlesticks as they are now known, are used to represent the same information as Price bars. The only difference is that the difference between the open and close form the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the blue color represents that the close was higher than the open.

If the box has a line going up from the box it represents the high and is called the wick. If the box has a line going down from the box, it represents the low and is called the tail.

Many interpretations can be made from these "candlesticks" and many books have been written on the art of interpreting these bars.

Chart Intervals & Time Frames:

A chart Time Scale & Period, or time frame, basically refers to the duration of time that passes between the OPEN and the CLOSE of a bar or candlestick.

For instance, with your broker software, you will be able to view a currency pair, in a 1-hour time frame over a 2-day period, 5-day period, 10-day period, 20-day period and 30- day period.

Most of the short-term time intervals (5-min and 1-min charts) are used for entry and exit points and the longer- term time intervals (1-hour and daily charts) are used to see where the general trend is.

Veteran Trader Martin Maier is the Founder of Fenix Capital Management, LLC He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Ratin

A Day in the Life of a Forex Trader

Are you looking into breaking into the field of professional foreign exchange trading? Or are you already a forex trader doing it regularly? Either way, this article may be of interest to you. The forex trader is a different breed of human being. They utilize the markets to earn a living everyday. We have a look into the insight of a day in the life of a forex trader.

Any professional forex trader has the potential to make massive returns from their initial investment or on the nastier side any trader can make massive losses. It is not a game of chance, trading is a skill of emotional control and sound decision making. Traders have an understanding of market mechanics and their behaviour as a response of economic trends.

Traders makes their living from taking advantage of price differences between the buy and sell price of currency pairs and more importantly they make their money by following the market trend. If you yourself have studies forex charts you may notice how the price fluctuates - there are only three directions the price can do: rise, fall or stay the same. Currency prices only stay the same if the currency value is not floated and fixed to a certain value. Traders make their money on the difference on price so the trader can either buy long and hope the currency rises or sell short as the currency drops in price and still makes a profit.

The advanced forex trader waits for a new trade or rather waits for the right time to open a new trade by looking for the right indicators and signs to signal an entry into the foreign exchange market. There are two things that the forex trader can do at home to watch out for an entry signal: look at charts or wait for news. Traders watch for the right trending signals to enter a trade. And the primary rule for the trader is that 'the trend is your friend.' Stick to the trend and you won't get hurt. Secondly, traders also watch the news. They must know what economic data is coming out on which days and what that data means to the future of the economy of the respective countries. If they don't keep track of these facts and economic data and indicators they may find that some currencies are especially volatile during these news announcement events and see the market jump. The forex trader must be ready for these economic announcements to ensure they can anticipate the increased market activity.

Once the forex trader has successfully entered into a trade, a trade that is going well the trader then simply rides the trend to completion, implementing a trailing stop to lock in profits as the price trends the way the trader wanted the trend to go. But if the trade goes sour, the forex traders needs to exit the trade with grace. The trader must cut their losses to succeed in the business of foreign exchange trading.

Hopefully this has given you an overview of what a professional forex trader does to make a living from simply taking advantage over the price difference. The technique is to enter a trade correctly using trend analysis or a news announcement and then follow the rules of "riding the trend" or the "trend is your friend" with "cutting your losses quickly."

This article "A Day in the Life of a Forex Trader" can be found in our Foreign Exchange (FX) Markets category.

George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for traders: forex, shares, derivatives, CFD's. MyShareTrading.com also provides free blogs for traders who wish to share their market experiences.

You may republish this article on the condition that it is not edited and all html links to our website is kept intact. MyShareTrading.com ? 2006

Learn Forex Trading and Multiply Your Wealth

To many people that sounds amazing, and perhaps it is. It can be very profitable for investors and fortunes have been made by many. The incentive to learn forex trading is the oldest incentive by far, the incentive to make profit. If you learn forex trading you are learning how to make your money make more money for you, the goal of all investors.

If you choose to learn forex trading online you are not alone since thousands of people choose this method every year. If you learn forex trading online you have the benefit of choosing an instructor from almost anywhere in the world, or to choose multiple instructors. When you learn forex trading in this fashion your virtual classmates could be from England, Hong Kong, Singapore, Paris, or any other exotic locale that you may have only read about in the past. Obviously this diversity of culture and knowledge will be beneficial. During online chats and student discussions questions will be raised that you may not have thought of yourself, and you'll be able to benefit by hearing the answers.

The ultimate goal of forex trading is to trade currency in a consistent manner that will result in profit. For instance, buying Euros with US dollars and then selling the Euros for more than you gave for them when the market changes. This is the oldest rule of business, buy low and sell high. If you learn forex trading you'll be able to do this on a scale you never would have thought possible, limited only by the amount of investment funds you have and by market conditions.

Forex-Resource-Pro.com - The Internet's Ultimate Forex Resource!

The Forex Market

* This article is divided into three sections. The first section is for beginners. The second section is for advanced traders. The third section is for everyone.

Section #1. For beginners . . .

On this article I will briefly describe what the Forex Market is for those who don't know about this subject. Also I will describe other trading opportunities that exist today on the Internet. I think that trading is one of those dream businesses that many people rush into, but to start trading online without the required knowledge could be a big mistake.

What's appealing about this business opportunity is the financial freedom it can bring to your life. Successful traders make lots of money working from home with their computers. Keep in mind that on this business . . .

1) You don't have to create any product.

2) You don't have to advertise anything.

3) Basically you just invest some money and multiply it more and more.

There are different trading opportunities on the Internet nowadays. I think that the hottest of them right now is The Forex Market. I will explain you why.

Currencies from many different countries were backed up by gold about one hundred years ago. It was called The Gold Standard. This basically meant that to print certain amount of paper money a predetermined amount of gold was needed. Also you could walk into the bank and request that your currency bills would be converted to gold. Then you could leave the bank with the gold.

This was a treaty between many countries and it lasted a few decades. Suddenly something happened that changed everything. Due to economic circumstances The Gold Standard was changed into a more flexible economic system.

Now, most countries were not required to back up their currencies with gold anymore, as long as they backed up their currencies with US dollars, everything was OK. Eventually this didn't work well either. So, at the beginning of the 70's decade this rule was totally abandoned and currencies started to float freely on the market.

This means that since that era until present time world currencies are not backed up by gold anymore, nor are they backed by any other particular type of money either. There are exceptions though. For example, some currencies of European countries are pegged to the Euro. Their exchange rate is fixed.

The same happens with the US dollar in relationship with other no so popular currencies. That's another story that I won't explain right now. The point is that most currencies change in value freely on the Forex Market today. Forex is an acronym for Foreign Exchange Market.

For a long time this market was reserved only for 'BIG BROTHERS'. In order for you to access this market you needed astronomical amounts of investment capital.

Everything changed with the computer age. As I have always said, everything is easier on the Internet. So, new online brokers emerged that allowed 'the little guys' play this game. Now you can open an account with as little as $300 when you needed millions just to think about starting on this business a few years ago.

The good thing about this market is the huge leverage you get. The brokers usually lend you up to 100 times as much as you have for trading. What does this mean? For example, if you open an account with 1,000 US dollars, you can control, as much as 100,000 units of the foreign currency.

Let's say that the EUR/USD pair is trading at 1.2000. In that case with 1,000 US dollars you can purchase approximately 80,000 Euros. The broker lends you the money to do it!

Anyway this is a very interesting topic but it is also wide. I can't give you all the details in here. So, I will proceed to share some advanced ideas for advanced traders and then I will tell you about other trading opportunities on the Internet.

Section #2. For advance traders . . .

Many traders are looking for the perfect trading system. They want to find the Holy Grail of Trading, which is an entry strategy that allows them to win, win, win and never lose. Even advanced traders fail because of this. They can't realize where the money is made.

Online trading can be regarding and profitable but you have to take it seriously. One of the biggest trading secrets of all is that you should use proper money management techniques as well as trading sizing strategies. That's how the BIG DOGS make the money.

Small traders know that they can't be always right. There is not such a thing as the perfect win, win, win and never lose strategy. If something like that exists then very few people know about it. Still, how do you think that many traders can be profitable month after month, year after year? How can they be consistently profitable?

I already gave you the answer above. The secret is on your money management techniques and your trading sizing strategies. Also, it is important to find a good entry and exit trading system.

If you combine these three aspects of trading above, you are almost guaranteed to succeed at it. This is easy once someone teaches you how to do it. Moreover, if you like this business you will have plenty of time to practice your strategies before you start trading with real money. In my book Easy Web Riches you can find valuable information about this subject.

Section #3. For everyone . . .

What else can you do to make money on the Internet without creating anything and without selling other people's stuff? You will find many other trading opportunities out there. For example, there are advance techniques to trade on the Stock Market that most people don't know. These are strategies that allow you to trade like a real professional.

Also there are other markets where you can make a lot of money. Many people don't know about The Futures Market. They have never even heard about it. I find that some traders are also interested in the options markets. You see, it is a matter of choosing what is right for you.

The Futures Markets is a market where farmers, big corporations, financial institutions and small traders, trade contracts on commodities, which will be executed at some time in the future. This market has existed for hundreds of years but today people trade commodities on the Internet like stocks and currencies.

Options are derivative financial contracts. They derive their value from the underlying securities, commodities, Futures contracts, etc. Options can explosively multiply your buying power, but they are dangerous too. They are always recommended for advanced traders only, not for the novice.

As you can see, there are different trading opportunities for you on the Internet. In fact there are others that I have not mentioned here. There is money to be made on these markets.

Once you learn the details, profiting from this business becomes quick and easy. Remember that this is a business in which you don't have to create anything nor sell anything either. All you do is to invest your money and multiply it.

EasyWebRiches.com

Simply the most important information! Ignore this and all your efforts to make money on the Internet will be futile! Visit www.easywebriches.com for . .

Learn By Hands On Forex Trading: Demo Accounts Vs Mini Accounts

If you are new to Forex, you are likely overwhelmed by the sheer amount of information you are finding about currency trading. Although the concept of trading the currency markets is simple to understand, the actual trading methodologies and understanding of how, why and when trades are executed can be hard concepts to grasp and fully understand. If you aren't aware by now, forex trading is not without substanial risks.

There are several schools of thought on how a new trader should progress from learning to actual live trading. In this article we will discuss the best ways for a new trader to learn how to trade the forex and make their first live trades.

To start out, I can not stress enough the need for hands on trading. This is why you will often hear it recommended that new traders start trading with a demo account. What is a demo account? Many online forex brokers offer something known as a "demo account" which is a fake account that you can trade until you feel comfortable trading your own funds. Demo accounts behave just like real accounts, the only difference is that the money you are trading is not real and no actual trades are ever executed.

The purpose of using a demo account if you are new to Forex trading is to get you comfortable making trades and to help you become familiar with the brokers trading platform. You can cut your proverbial teeth so to speak without risking any of your own funds. This makes demo accounts good for a brand new trader who just wants to see how trading works. There are some drawbacks however to using demo accounts to learn Forex trading.

The biggest downside to using a demo account is that you will likely only be able to trade standard size accounts with a demo account. If you intend to trade mini accounts, as many beginning forex traders do, a standard size demo account is going to behave differently than a mini account. Your margins are very different for a standard account versus a mini account. If you become accustomed to trading a standard size account, your trading methodologies will show it. This is because the larger margins offered on standard size accounts allow you to take greater profits from smaller movements in currency prices.

The other major downside to trading with a demo account for learning forex is that as a trader, you need to carefully manage the emotional aspects of trading real money. Since a demo account is fake money, detachment is easy to come by. Once you start trading your actual funds, you might just find that your tolerance for risk is much more conservative. Ideally, as you are learning to trade you are also learning how to manage your risks most effectively.

So what is a beginning trader to do? What is the best way to learn to trade the Forex, hands on?

Once you have read, studied, and completed any courses on Forex trading that you may be taking, you are ready for probationary live trading. The single best way to trade the Forex is to just Do it. Now, this does not mean to jump in and trade a full size account with real money, this would be an enormous risk for a new trader and not a very smart move indeed. What you can do is to find a broker that offers mini accounts. Mini accounts typically start at $200 and typically give you 100:1 leverage. That said, as of this writing, there is one broker (Easy-Forex) that allows you to trade a live mini account for as little as $25.

For less than you paid for any of your books, courses or training materials, you can actually try live trading. You will be amazed at how after just a few trades, the stubborn concepts seem to start making sense and you begin to understand Forex trading.

Now, if you do decide to begin your trading with one of these tiny mini accounts, you should start by making several very small trades. You should also be trading with the same system or methodology that you are trying to perfect. Your profits will likely only be a few dollars since you are trading on a small margin. This is good, however because the reverse is true as well, you are only ever risking a few real dollars. If you happen to have a series of loosing trades and wipe out the funds in your demo account, you can consider it the least expensive education you could possibly get in actual forex trading. Much better than loosing large sums of funds, and more realistic than trading a demo account. Just learn from the experience, and consider it a good deal on a valuable lesson.

Once you are comfortable trading your mini account, you can always have it converted to a regular account (with an additional deposit) if you choose. Overall, it cant be stressed enough, the best way to learn the Forex is to have experience with live hands on trading. This article showed you ways that you can do this at a minimal cost and with the smallest amount of risk.

New to Forex? Check out Our Free Forex Training or read these Forex Articles. Looking for an easier way? Learn More about a Managed Forex Account

#What's Fibonacci Forex Trading?

Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.

Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it's formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 ...But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.

These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.

Forex trading can greatly benefit form this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.

Fibonacci price points, or levels, for any forex currency pair can be calculated in advance so that the trader will know when to enter or exit the market if the prediction given by the Fibonacci forex day trading system he uses fulfills its predictions.

Many people tries to make this analysis overly complicated scaring away many new forex traders that are just beginning to understand how the forex market works and how to make a profit in it. But this is not how it has to be. I can't say it's a simple concept but it is quite understandable for any trader once he or she has grasped the basics and has had some practice trading using Fibonacci levels along with other secondary indicators that will help to improve the accuracy of the entry and exit point for every particular trade.

Free chapters of a forex day trading system can be downloaded at the author's website in case you are interested in learning more about Fibonacci forex trading.

Adrian Pablo; Forex trader and freelance writer.

http://www.1-forex.com

"How To" Start Trading The Forex Market? (Part 5)

What are *PIPS* ?

Currencies are traded on a price/ point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you'll see something listed like this:

EUR/USD 1.2210/13

Explanation:

a) If you want to BUY the EUR/USD ( meaning you BUY EUROS and SELL US$ ) you buy 100,000 EUROS and you SELL 122,130 US$, or in other words you receive 122,130 US$ for 100,000 EUROS.

B) If you want to SELL the EUR/USD ( meaning you SELL EUROS and BUY US$ ) you buy 122,100 US$ and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US$.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair.

For example a quote of USD/CHF 1.3000 means that fore one U.S. dollar you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US$.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/CHF quote above increases to 1.3050 the dollar is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as EUR/USD 1.2080, meaning that for EURO you receive 1.2080 U.S. Dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one Euro, British pound or an Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the calculation is the same. For example, a quote of EUR/JPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going " LONG ")and SELL ( going " SHORT ") in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don't keep losing money. Most of the novice traders are lowering their stop loss just to "prove they are right" or "hoping that the market will reverse". 99% of these trades, are ending up with more losses. Most of the profitable trades are usually "right" immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses.

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going "long") or a *sell position* (known as going "short").

As an example let's assume you've been studying the EURO. The EURO is paired first with the U.S. dollar or USD.

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EUR/USD pair meaning you will simultaneously buy EUROS, and SELL dollars).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EUR/USD pair is trading at:

EUR/USD: 1.2010/1.2013

As you you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market.

As an example, lets say you bought one lot EUR/USD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS?

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bid/ask price for USD/JPY is 107.50/107.54, meaning you can buy $1 US for 107.54 YEN, or sell $1 US for 107.50 YEN.

Suppose you think that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US $100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be $ 250.)

As you expected, USD/JPY falls to 106.50/106.54, meaning you can now buy $1 US for $106.54 Japanese YEN or sell $1 US for 106.50.

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US dollars, divide 100,000 by the current USD/JPY rate of 106.54

Total profit = US $938.61

Veteran Trader Martin Maier is the Founder of Fenix Capital Management LLC He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Rating Companies such as STAR and MAR.

?How To? Start Trading The Forex Market? (Part 5)

What are *PIPS* ?

Currencies are traded on a price/ point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you'll see something listed like this:

EUR/USD 1.2210/13

Explanation:

a) If you want to BUY the EUR/USD ( meaning you BUY EUROS and SELL US$ ) you buy 100,000 EUROS and you SELL 122,130 US$, or in other words you receive
122,130 US$ for 100,000 EUROS.

B) If you want to SELL the EUR/USD ( meaning you SELL EUROS and BUY US$ ) you buy 122,100 US$ and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US$.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair.

For example a quote of USD/CHF 1.3000 means that fore one U.S. dollar you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US$.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/CHF quote above increases to 1.3050 the dollar is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as EUR/USD 1.2080, meaning that for EURO you receive 1.2080 U.S. Dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one Euro, British pound or an Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the calculation is the same. For example, a quote of EUR/JPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going ? LONG ?)and SELL ( going ? SHORT ?) in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don't keep losing money. Most of the novice traders are lowering their stop loss just to ?prove they are right? or ?hoping that the market will reverse?. 99% of these trades, are ending up with more losses. Most of the profitable trades are usually "right" immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses.

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going "long") or a *sell position* (known as going "short").

As an example let's assume you've been studying the EURO. The EURO is paired first with the U.S. dollar or USD.

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EUR/USD pair meaning you will simultaneously buy EUROS, and SELL dollars).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EUR/USD pair is trading at:

EUR/USD: 1.2010/1.2013

As you you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market.

As an example, lets say you bought one lot EUR/USD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS?

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bid/ask price for USD/JPY is 107.50/107.54, meaning you can buy $1 US for 107.54 YEN, or sell $1 US for 107.50 YEN.

Suppose you think that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US $100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be $ 250.)

As you expected, USD/JPY falls to 106.50/106.54, meaning you can now buy $1 US for $106.54 Japanese YEN or sell $1 US for 106.50.

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US dollars, divide 100,000 by the current USD/JPY rate of 106.54

Total profit = US $938.61Veteran Trader Martin Maier is the Founder of Fenix Capital Management LLC He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Rating Companies such as STAR and MAR.

Forex And Commodities Futures And Options. What To Know Before You Trade.

The popularity of trading futures and options has been growly rapidly for several years. The ease of accessing constantly updated data online has prompted an increased fever by day traders to attempt to be successful and make money in this risky investment area. Individuals can now trade these markets with the same ease and speed as large companies.

Trading forex ( foreign exchange ) and commodity futures and options is not for everyone. It is a complex and risky business that experiences volatile price and value swings. Before you invest any money in forex, commodities futures or option contracts, you should:

? Consider your financial trading experience, goals, and financial resources and know how much you can afford to lose above and beyond your initial payment.

? Understand commodity futures and option contracts and your obligations before commiting your finances into trade contracts.

? Understand your risk exposure and aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

? Know who to contact if you have a problem or question.

? Ask more questions and gather more information before you open an account.

Commodity futures and option contracts:

A futures contract is a legally binding agreement between two parties to buy or sell a specific financial product or commodity in the future, on a designated exchange, for a specific quantity of a commodity at a specific price. The buyer and seller of a futures contract will agree now on a price for a product to be delivered, or paid, for at a specifically set date and time in the future, which is known as the "settlement date." Actual delivery of the commodity can take place in fulfillment of the contract, but most futures contracts are actually closed out or "offset" prior to delivery.

An option on a commodity futures contract is a legally binding agreement between two parties that gives the buyer, who pays a market determined price known as a "premium," the right (but not the obligation), within a specific time period, to exercise his option. Exercise of the option will result in the person being deemed to have entered into a futures contract at a specified price known as the "strike price." In some cases, an option may confer the right to buy or sell the underlying asset directly, and these options are known as options on the physical asset.

In the United States, an individual, cannot trade futures contracts and options on futures contracts directly on an exchange. A person or firm must trade on your behalf. People and firms who trade on your behalf as a customer generally must be registered with the Commodity Futures Trading Commission.

Two general categories of trading accounts:

? Individual Account. In an individual account, trading is done only for you. An individual account may be setup as either a "non-discretionary" or a "discretionary" account. A "non-discretionary" account, means that you will make all of the trading decisions and the broker may not execute any transactions without your prior approval and consent. A "discretionary" individual account, means that you give permission to the broker firm carrying your account or some third party to make trading decisions on your behalf.

You may open an individual account with a registered Futures Commission Merchant or through an Introducing Broker. An Introducing Broker may accept your orders and transmit them for execution to a Futures Commission Merchant with which the Introducing Broker has a relationship. You deposit funds directly with the Futures Commission Merchant. In an individual discretionary account, you grant power-of-attorney to a Futures Commission Merchant, an Introducing Broker, one of their Associated Persons, or a Commodity Trading Advisor to make trading decisions on your behalf.

Commodity Pool. You may also trade commodities through a "commodity pool." This means you are purchasing a share or interest in the pool, and trades are executed for the pool as a whole, rather than for the individuals who have interests in the pool. Pool participants share in any gains or losses.

If you have a dispute or a problem arises out of your commodity futures or option account, first try to resolve the problem with your broker. If that is not successful, then you have options for resolving disputes: (1) the CFTC Reparations program; (2) industry sponsored arbitration; or (3) court litigation. In selecting a particular approach, you may want to consider the cost, length of time involved and whether or not the assistance of an attorney is required. More information on dispute resolution is available from the CFTC's Office of Proceedings (202-418-5250).

A Checklist "Before You Trade":

Make sure you have:

? Clearly identified your financial goals, including the amount of risk and loss you can handle?
? Determined how much assistance and help you may want from a trading advisor in making trading decisions?
? Checked the registration status and disciplinary history of the advisor or pool you select with the National Futures Association?
? Received and thoroughly reviewed the disclosure document -- before you open an account?
? Clearly understood the disclosure document, including the statement of fees, the potential for loss, your right to withdraw your funds and the "break-even analysis?"

Make sure you ask questions for anything that you do not understand. Remember, it is your money, make sure you know where it is going.

Call the CFTC or the NFA with any questions you may have?

http://www.cftc.gov
http://www.nfa.futures.orgArticle is courtesy of http://www.forex-trading-i.com/ . Visit for more information on Forex, Commodities and Futures Trading. This article may be freely reprinted as long as the author's resource box and url links remain intact.

Online Forex

 by: Rafik Patel

Q1: When you consider that the foreign exchange market has become the world's largest financial market, with over $1.5 trillion USD traded daily, where does it go from here?

A1:The FX market is unique, in the UK there is no central exchange, we trade via the inter bank market. With more and more private individuals taking up margin trading and new forex brokers setting up, I can only see the market grow in the near future.

Q2: Other than great liquidity, what are the principal benefits attached to the forex market?

A2: There is less to consider when trading the forex markets, there are only a number of variables that affect the pricing.

Main advantages include

Forex Market allows 24 hour trading

Greater leverage - with most brokers offering 100 1,

Less starting capital required,

More Liquidity - day trading has to have enough volume to make it worth our while. The currency market is more liquid than all the world stock markets put together. Currencies are always in action,

Free trading systems

Better for shorting - There are artificial controls built into the market to prevent it from going down too fast. The reason is that we live in a biased world that likes to see things go up instead of down. One of these artificial contraptions is the "uptick rule," which comes into play when shorting stocks, making it more difficult to sell a stock short than to buy it. This is unheard of in the currency market. Selling currencies short while day trading is just as easy as buying them.

Ideal for Short Term Traders -

Q3: Limited market access, liquidity issues-after market hours, commission fees, capital requirements and short selling/stop restrictions are just some of the issues investors face when considering other markets. Given that the forex market removes many of these traditional barriers and therefore does not restrict the forex traders' ability to make a trade at the right time, are we likely to see an increase in trading volumes this year?

A3: With all these advantages, traders are finding it hard not to trade currencies, online trading volumes across all products is increasing at a substantial rate, however FX trading, predominantly amongst retail investors is becoming very popular.

Q4: There is stiff competition amongst online forex service providers for retail forex traders with some claiming to offer the same degree of technical analysis enjoyed by the world's largest banks and institutional traders. Is this possible?

A4: Technical Analysis has come a long way, more and more forex provides now have partnerships with firms who provide analysis. However the banks still have an advantage, the markets are still not under perfectly competitive economic model. The banks will always have access to information that is not readily available, ISX FX currently sources its information from a number of banks to fill this gap.

Q5: Do you subscribe to the theory that forex is less volatile than stocks because the market is much deeper?

A5: As a bet on the direction of a national economy, no currency has ever dropped 25 percent in a day, or imploded as rapidly and completely as an Enron or a Parmalat. In the wake of those scandals, many companies are meting out information more cautiously, making it harder to get the real "scoop" on stocks one problem of trading with too-high leverage is that one piece of surprise news can wipe out one's capital. If you treat forex trading like a business, including proper money management, you have a better chance of success."

Q6: U.S. interest rates-decade lows; global trade wars and terrorism fears have dominated the headlines recently. What impact has this had on retail volumes?

A6: The above factors have all led to a decline in the dollar. This coupled with tighter regulation of brokers has given investors more confidence in brokers. Also the stock market crash has driven individuals to look at the profit opportunities offered by forex.

Q7: Stateside the Commodity Futures Trading Commission (CFTC) has brought 58 actions against firms, since its new powers were awarded in 2000. Given that certain brokers continue to abuse the system, with investor money sometimes not being traded in the markets promised. What can investors do protect themselves?

A7: The retail forex market is in essence betting, as with any bookmaker there is always a risk that you will not get your winnings, or the odds will be highly stacked against you. With tighter regulation and increased competition, this risk of default has largely disappeared. The risk of price manipulation still exists and this will never really go away. Investors need to ensure that they have an independent price source and trade with a broker who offers true one click dealing. Most brokers work on the basis of the law of large numbers, acting like the bucket shops of 50 years ago, they do not hedge any positions and are directly competing against there clients. This will always lead to price manipulation and further actions by authorities will inevitably be taken.

Q8: What is this best way for currency rookies to get involved in the market?

A8: Like with any new form of trading you need to know what you are doing, especially as there is margin involved. Take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going 'live' with your own money. Investors should read books, attend seminars and paper trade until they are comfortable with there strategy.

Rafik Patel C.E.O. ISX FX LIMITED. www.isxfx.com

rafik@isxfx.com

Forex Market Offers Opportunity And Information

 The forex market is what is called an international exchange currency market, where currencies are exchanged on a daily basis. There are five forex market centers around the world New York, London, Tokyo, Frankfurt and Zurich. One does not need to be on the trading floor, so to speak to be involved in the forex market. Today, forex trading can be done from home on a computer.

The forex market itself is basically a worldwide connection of traders, who make investment moves based on the price of currencies, or their values relative to other currencies. These traders constantly negotiate prices with other traders resulting in the fluctuation or movement of a currency's value. The value of a currency on the forex market also corresponds with supply. If there is greater demand for the Euro, let's say, then there will be less supply of it on the forex market, which means, in time, it will make a Euro more valuable compared to let's say the dollar. In short, in this forex market situation, one Euro would yield more dollars, subsequently weakening the dollar as well. Analyzing the forex market's fluctuations allows investors to make predictions on how a currency will move in relation to another currency. They then can make predictions and buy and sell currency accordingly.

While some people view the forex market as a place to see what their exchange rate will be when they travel abroad, others view it as an opportunity to make great gains in their financial planning and future.

Jay Monclif is an specialist in forex trading. He helped many entrepreneurs to get more for their money at http://www.forexadvise.info . Get more updated daily about Forex in his Broker forex site http://www.forexadvise.info
Jay Moncliff - http://www.forexadvise.info